Indian Rupee: Plunges To Fresh Lows As US Pulls Out From Iran Deal

The Indian rupee plummeted to a fresh 15 month low against the dollar in early trades on Wednesday, 09 May 2018 after US President Donald Trump pulled the United States out of an international nuclear deal with Iran. Surging demand for the greenback as crude oil prices zoomed past USD 76 per barrel level amid foreign capital outflows further weighed down the currency. Early losses in stock markets and demand for the US currency from importers also dampened rupee sentiments.

The rupee plunged by 37 paise to 67.37 against the US dollar in early trade today and dropped to a low of 67.45 so far during the day. In the spot currency market, the Indian unit was last seen trading at 67.3175. The dollar strengthened against major global currencies overseas as crude oil prices rallied and pushed Treasury yields higher after US President Donald Trump pulled out from the international nuclear deal with Iran. Yesterday, the rupee gained five paise to 67.08 against the US currency on suspected RBI intervention and stray dollar demand.

Domestic benchmark indices were trading lower in early trade as investors assessed the implications of President Donald Trumps decision to scrap a nuclear deal with Iran. At 9:20 IST, the barometer index, the S&P BSE Sensex, was down 47.96 points or 0.14% at 35,168.36. The Nifty 50 index was down 13.45 points or 0.13% at 10,704.35.

Overseas, most Asian shares were trading lower following President Donald Trumps announcement that the US would pull out of the Iran nuclear deal. US stocks came off their lows on Tuesday to end a choppy session little changed, after Trump announced the US was abandoning the 2015 Iran nuclear deal, which was forged by former President Barack Obama three years ago. The president also said he planned to ramp up penalties against Tehran, including the highest level of economic sanctions.

Meanwhile, the U.S. Dollar advanced to its highest level of the year against a basket of currencies on safe-haven buying, as investors reacted to President Trumps decision to step away from the Iran nuclear deal and re-impose sanctions. The dollar was also supported by political turmoil in Italy that rattled Euro traders.